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13 of 24 TIEAs now in force

Three more of The Bahamas’tax information exchange agreements(TIEAs)entered into force this year, bringing the total to 13 of the 24 TIEAs signed.

The tests that determine whether a territory falls on either the Organization for Economic Cooperation and Development’s(OECD)white list, gray list or black list is no longer about surpassing a specific number of TIEAs signed, however.Guardian Businessrecently asked the Bahamas Financial Services Board(BFSB)to explain what the Group of 20 nations(G20)standard currently is.

“Ultimately, the standard requires that jurisdictions exchange information with all relevant partners, meaning those partners who are interested in entering into an information exchange arrangement. Agreements cannot be concluded only with counterparties without economic significance,”read the statement the board provided, which was taken from an OECD Global Forum on Transparency and Exchange of Information for Tax Purposes report.

According to the report, the appearance of only entering agreements or negotiations with partners not likely to have a reasonable expectation of requiring information to administer and enforce their tax laws, may indicate a”lack of commitment to implement the standards.”

According to an OECD website publication on the TIEA,”Fishing expeditions are not authorized but all foreseeably relevant information must be provided, including bank information and information held by fiduciaries, regardless of the existence of a domestic tax interest or the application of a dual criminality standard.”

The territories that now have enforceable TIEAs with The Bahamas include the United States, China, France, Finland, Norway, Denmark, The Faroes, the Netherlands, Sweden, Mexico, the United Kingdom, Australia and Monaco. Yet to be enforced are agreements with San Marino, New Zealand, Argentina, Belgium, Greenland, Iceland, Spain, Germany, Canada, Japan and India.

Barbados recently underwent its Phase I peer review process. The assesment of the Global Forum, released early this year, concluded that although excellent progress had been made, Barbados technically fell short of the OECD standard. Barbados’Prime Minster Freundel Stuart announced in January that the nation’s Income Tax Act would be amended to allow a basis in its laws for tax information exchange under its existing double taxation agreements with its treaty partners.

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